Oil prices slid on Tuesday to their lowest in almost six years, but European shares rose as investors focused on expectations that policymakers would soon take action to prevent the euro zone slipping into deflation.
Strength in European shares and the prospect Wall Street would open higher saw the dollar reverse earlier losses against the safe-haven yen. Weaker-than-expected British inflation data pushed sterling towards an 18-month low against the U.S. currency.
Brent crude fell as low as $45.19 a barrel, extending Monday's 5.3 percent fall in the benchmark price. It later recovered to $45.92, down 3.5 percent on the day.
The rout -- oil prices have fallen 60 percent since June -- continued despite data showing Chinese imports of crude surged to a record 7.15 million barrels a day last month.
Policymakers fear cheap oil could help pitch key economies into a deflationary tailspin. Then European Central Bank is expected to launch a large-scale programme of government bond buying soon, possibly at its Jan. 22 policy meeting.
European energy shares fell but retailers, some of which reported strong Christmas sales, rose on the prospect of consumers having more money to spend.
"The weaker oil price would put more money in consumers' pockets," said Andrea Williams, European equities fund manager at Royal London Asset Management.
The pan-European FTSEurofirst 300 index was last up 1.1 percent, having opened lower.
Stock index futures indicated Wall Street would open higher.
In a further sign that oil's slide is not all bad news, metals company Alcoa reported a forecast-beating fourth-quarter profit late on Monday, partly due to lower energy costs.
MSCI's main index of Asia-Pacific shares, excluding Japan was up 0.2 percent, though Tokyo's Nikkei 225 index closed down 0.6 percent, partly on yen strength.
The dollar fell to 117.74 yen, its weakest since Dec. 17, before recovering to 118. 56, up 0.2 percent on the day.
The greenback was up 0.4 percent against the euro at $1.1792, reflecting expectations of ECB action to spur growth in a flagging economy. Data on Tuesday showed bailed-out Greece mired in deflation in December and German engineering orders down 10 percent year-on-year in November.
"All these add to view that the ECB will have to act fast. Investors with long dollar positions will want to keep them and target recent lows in the euro," said Niels Christensen, FX strategist at Nordea.
Euro zone government bond yields fell on the prospect of looser ECB policy and a slew of euro zone countries sold debt in a bid to lock in ultra-low borrowing costs
London copper prices slipped below $6,000 a tonne, a fresh-five-year low, as the fall in oil spurred selling by hedge funds in China, despite strong trade data from the top user of the metal and signs of physical demand.
Gold hit a 12-week high, rising as far as $1,243.60 an ounce , as investors sought refuge from turbulence in stocks markets and currencies.